Environment and Trade

AN agreement on the Uruguay Round of trade negotiations would be a critical step toward improving the economic well-being of farmers in the developing world and saving its deteriorating farm lands. It also would bring environmental and economic benefits to the United States.Every day millions of poor farmers are forced to make an unenviable decision - protect the productivity of the land for future generations or over-exploit the land in order to feed their children today. Not surprisingly, the environment is generally the loser. The results are devastating and felt worldwide. Global warming, fueled by deforestation, could cause dramatic weather shifts and a rise in sea levels around the world, both with dire economic consequences. And the loss of biological diversity may destroy the chances of discovering new pharmaceuticals and other useful products. Environmental degradation in developing countries often occurs because they lack the financial resources to protect land. Governments not only lack the means of teaching farmers to use environmentally sustainable methods, but, desperate for foreign exchange to service debt, they create incentives that encourage deforestation. A destructive cycle is perpetuated: Land is depleted and abandoned for more productive land, which is itself eventually depleted and abandoned. Sustainable development - using resources responsibly today so they will be available in the future - requires a long-term outlook and adequate financial resources. Many developing countries lack both. Agricultural trade liberalization, one goal of the Uruguay Round, would open new markets to developing countries. These markets could provide financial resources for developing countries to pursue sustainable development. Liberalization would also benefit the US, which already conducts at least one-third of its trade with developing countries and could export much more to healthier economies. Removing trade barriers in developed countries would generate significant income for developing countries. US protectionism in the sugar industry alone now costs developing countries roughly $800 million annually. The new revenues could be used to maintain the productivity of land and to prevent permanent land degradation. TRADE liberalization would also allow many developing countries to diversify their agriculture. Their dependence on environmentally destructive traditional cash crops such as cotton and cassava, as well as cattle ranching, could be reduced in favor of tree crops, fruits, vegetables, cut flowers, and other more environmentally benign products. The current system of price supports, subsidies, and import barriers in industrial countries distorts global agricultural production and denies financial resources to developing countries. In theory, labor-intensive developing countries should supply the majority of agricultural goods to the world. Instead, inefficient farmers in developed countries produce the bulk of agricultural products, spurred on by unnaturally high domestic prices. This distortion causes environmental damage in both developed and developing countries. In the former, high prices encourage overproduction and excessive use of land, pesticides, and water resources. Overproduction leads to oversupply which lowers world agricultural prices and causes price fluctuations, decreases developing country income, and makes only large-scale farms economically viable. Subsistence farmers, pushed off the land by expanding farms, are forced up hillsides and into forested areas. The ir battle to survive leads to deforestation, soil erosion, loss of watershed, and many other environmental problems. Removing subsidies and trade barriers in industrial nations would shift most agricultural production from the developed North to the developing South and make international markets more stable. This change would bring much needed foreign exchange to these countries and potentially decrease the pressures on natural resources in the developed countries. As domestic agricultural prices fall in industrial countries, inefficient producers will drop out of the market, but consumer demand will increase. Industr ial countries will turn to developing countries to meet this demand. Some environmentalists are concerned that as developing countries become the bread basket of the world the demands on their natural resources will increase. The potential for environmental degradation certainly exists if developing countries continue with environmentally destructive farming. Increased demand for goods from these countries could lead to more land under cultivation and wider use of chemical pesticides. But there is widespread awareness in the developing world that sustainable practices are essential for survival, not just development. The continuation of unsustainable methods poses the threat. Freer trade will give many developing countries the means to change their damaging behavior; it is an essential first step toward sustainable development. During the five years of the Uruguay Round, the US has rightly held to demands for significant reductions in agricultural trade barriers. But with only a few weeks left to complete the round, the US must compromise, with the explicit understanding that further negotiations on agricultural trade will follow. The benefits would be realized not only in developing countries, but in the global environment and in developed economies like that of the US.

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